HMO calls it quits

July 01, 1999|By ERIN HEATH

More than 1,100 senior citizens in Washington County will have to switch to traditional Medicare coverage after the last remaining HMO available to Medicare recipients in Maryland drops its managed care program starting in January 2000.

CareFirst BlueCross BlueShield announced Thursday it would have to end service to about 14,000 members in 17 rural Maryland counties after losing about $10.6 million from 1996 to 1998.

CareFirst lost money because monthly federal reimbursements for each member did not cover the prescription medication and hospital costs in the affected counties. Reimbursements rates are based on demographic factors like age, sex, location and medical history.

"Another choice is being taken away from Washington County. We are being orphaned," said Katrina Eversole, health insurance advocate at the Washington County Commission on Aging.

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As of March, there were 1,132 CareFirst members in Washington County, according to Jeff Valentine, CareFirst's director of corporate communications.

"The company really did make this decision reluctantly," he said. "We know it is going to cause disruption for a lot of our members, but unfortunately under the reimbursement rates by the federal government, we can't continue."

The low reimbursement rates not only caused CareFirst to lose money, but they also caused a growing number of doctors to withdraw as CareFirst providers, Valentine said.

When two other HMOs stopped their managed care programs in the area last year, CareFirst decided to remain and began charging a $75 premium for coverage. It lost more money in Washington County than in any other county in Maryland, with $126 spent for every $100 made. Projected losses in the county for 1999 are $1.9 million, Valentine said.

"I'm very, very sorry to hear that," said Edwin M. Kemp, 91, of Williamsport. Kemp and his wife joined CareFirst's program when it was first offered at no cost in 1996.

Now that CareFirst is pulling its program out of the county, local senior citizens will have to rely on traditional Medicare and Medigap insurance, Eversole said.

Medicare is the federal health care insurance program for people over 65. Medigap is designed to cover medical costs that Medicare leaves out, Eversole explained. It comes in ten plans labeled A through J. CareFirst will still offer certain Medigap plans to county residents.

Medigap has its advantages, Eversole said. Once a senior citizen signs a Medigap agreement, the benefits will not change and the service will not leave the area. In addition, those covered by the plan will be able to go to any doctor they want at any time, rather than being restricted to the doctors within the plan's network.

But CareFirst members will lose the company's $1,000 annual prescription drug coverage and its preventive care measures such as yearly physicals and dental and vision exams.

Eversole recommended that members of the CareFirst managed care program stay with it until service ends. From Dec. 31, 1999, CareFirst members will have 63 days to choose a new plan.

"It's to their benefit to use up their prescription coverage and stay with CareFirst until the end of the year," she said.

If the members do nothing, they will be automatically covered by traditional Medicare. But Eversole advised senior citizens to seek additional coverage. With Medicare alone, patients aren't covered for $768 of a hospital stay, and they can be charged that amount up to five times a year.

Medigap Plans A, B, C and F will be guaranteed to CareFirst members with no waiting period, even if they have a preexisting medical condition, she said.

However, Plans H, I and J are the only ones with prescription coverage, and they have the most expensive premiums, Eversole explained.

Some county residents with low income and assets may qualify for special coverage through state programs, she said.

CareFirst's managed care program will continue in the metropolitan areas of Maryland and in Washington, D.C., where reimbursement rates are higher, Valentine said, but members living in those areas will now have to pay a $50 premium.

U.S. Sen. Barbara Mikulski, D-Md., has been calling for the Clinton administration to develop a plan to stop Medicare HMO pullouts in rural areas. She recently wrote a letter to President Bill Clinton stating, "I am deeply concerned and worried about seniors in Maryland who received their health care through a Medicare HMO."

Clinton announced his plan Tuesday to expand Medicare to include prescription drug coverage; however, the plan would not take effect until 2002.